Tuesday, April 16, 2013

Burned on the Fourth of July

Paul Krugman writes Holy Coding Error, Batman on a critique of Reinhart and Rogoff 2010 -- the paper which asserted an association between dept to GDP ratios over 90% and slow growth. The critique (via Mike Konczal) asserts that simple analysis of the raw data does not support Reinhart and Rogoff's conclusion. Konczal also notes that other researchers long since complained that Reinhart and Rogoff did not release their raw data. I clicked the link to Dean Baker and read

a separate paper that claims that economies perform more poorly once their debt to GDP ratio exceeds 90 percent. Mr Rogoff and Ms. Reinhart have declined to adhere to standard ethics within the economics profession and have refused to share the data on which they base their conclusion with other researchers.

That's strong language even for Baker. The Baker post is dated July 4 2010 ! It's been over 2 years and 9 months since Reinhart and Rogoff's ethics were publicly challenged. The new information is not reassuring. I am, as often happens, astonished by my ignorance -- I had no idea that there was anything unusual about public data availability. I note that the article was published in the AER

Reinhart, Carmen M., and Kenneth S. Rogoff. 2010. "Growth in a Time of Debt." American Economic Review, 100(2): 573-78.
The AER has rejected all of my submitted manuscripts, but I always assumed that raw data had to be made available to the AER prior to publication and that the AER shared the data with the public. What happened ?

Also new blog heading "Bakers' dozen" for the 13 times Baker is way ahead of most economists (especially including me). We have
1) The housing bubble
2) It makes no sense to assume labor productivity growth will slow but returns on equity will stay high when defending Bush's Social Security scheme.
3) The 2007-9 recession is actually close to what one would predict based on the decline in housing prices based on data collected when underwater mortgages were extremely rare.
4) This.

I don't want to suggest that Baker is much less original than I thought for a moment there. I do *Not* want to get on his bad side. I need 9 more examples STAT. In comments please.